TaxTMI 
TaxTMI 
2026 (2) TMI 228
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....012 37,44,226/- Recovery for cash amount E/55354/2023 2. July 2016 to September 2016 81,78,390/- Refund E/55123/2023 3. October 2016 to December 2016 78,37,729/- Refund E/55129/2023 4. January 2017 to March 2017 58,21,966/- Refund E/55127/2023 5. April 2017 to June 2017 39,23,495/- Refund E/55124/2023 6. July 2016 to September 2016 45,85,846/- Recovery for cash amount E/55034/2023 October 2016 to December 2016 39,39,434/- 7. January 2017 to March 2017 31,47,028/- Refund E/55128/2023 8. April 2017 to June 2017 30,18,502/- Refund E/55125/2023 3. The appellant is engaged in the manufacture and sale of tyres. During the period of dispute, the appellant charged central excise duty on the tyres supplied to its dealers who subsequently sold it to the customers. As a business practice, after completion of sale to the dealers, basis certain pre-defined criteria, discounts were given to such dealers by way of credit notes. As excise duty was paid by the appellant on the original invoice value, without reducing the discount, the appellant use....
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....e show cause notice is not issued within the stipulated time, no recovery proceedings can be initiated. Therefore, I find that the Adjudicating authority has rightly issued show cause notice before initiation of recovery proceedings. The Adjudicating Authority has also relied up on various judicial pronouncements in support of his finding." 7. Regarding the rejection of the refund applications filed by the appellant, the Commissioner (Appeals) has recorded the following findings: "08.4.1 In the present Appeals, I find that the Adjudicating Authority following the principles of natural justice requested the Appellant to establish that the incidence of duty of which they have sought refunds has not been passed on to any other person. The Adjudicating Authority invoked the provisions of unjust enrichment relying the principle laid down by the Hon'ble Apex Court in judgement rendered in the case of CCE vs. Addision & Co. Ltd. reported in 2016(339) E.L.T. 177 (S.C.) wherein it has been held that the word 'buyer' in Clause (e) to proviso to Section 11B(2) of the Act cannot be restricted to the first buyer from the manufacturer and thus, in light of the said conclu....
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....s CCE-1994 (71) ELT-989 which was affirmed by the Hon'ble Supreme Court, that issuance of credit note subsequent to the transaction will not save the assessee from the provisions of unjust enrichment envisaged under Section 11B." (emphasis supplied) 8. It is, therefore, seen that the only issue that arises for consideration is whether the bar of unjust enrichment is satisfied in the present cases or not. It is not in dispute that the appellant had reduced the price by credit note or cash discount to its dealers. 9. Shri Kamal Sawhney, learned counsel assisted by Shri Deepak Thackur and Ms. Aakansha Wadhwani submitted that the Commissioner (Appeals) committed an error in dismissing all the appeals. Learned counsel submitted that in so far as two appeals relating to recovery of the refund amount already paid to the appellant, the Commissioner (Appeals) completely failed to notice that in respect of Excise Appeal No. 55354 of 2023 covering the period from October 2011 to June 2012, the Tribunal by order dated 04.06.2015 and decided the matter in favour of the appellant and held that the appellant was entitled to refund of both the quantity discount amount and the cr....
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.... from October 2011 to June 2012. The Commissioner (Appeals) had allowed cash discount to the appellant but had rejected the discount towards quantity. Both the appellant and the department filed appeals before the Tribunal. The appeal filed by the appellant was allowed while the appeal filed by the department was rejected. In view of the said decision of the Tribunal, the appellant would be entitled to refund of the cash discount. It is seen that though the Commissioner (Appeals), by order dated 17.07.2014, had allowed the appeal filed by the appellant for refund of cash discount but still the show cause notice was issued under section 11A of the Central Excise Act, 1944 [the Central Excise Act] for recovery of the amount. It is also seen that ultimately, the Tribunal by its decision dated 04.06.2015 dismissed the appeal filed by the department. 18. The issue, therefore, that would arise for consideration is whether a show cause notice could be issued under section 11A treating the amount paid to the appellant as erroneously refunded. This issue was examined by this Tribunal in Excise Appeal No. 51410 of 2018 (Bridgestone India Pvt Ltd vs. CGST & CE, Ujjain) decided on 30.01.201....
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....decisions dated 04.06.2015 and 30.07.2018. Though these two decisions were placed before the Commissioner (Appeals) in the Written Submissions filed by the appellant but they have not been examined by the Commissioner (Appeals). The Commissioner (Appeals) has also rejected the Certificates of the Chartered Accountant filed by the appellant to show that the incidence of duty had not been passed on to the customers and also affidavits of the dealers to show that the incidence of duty had not been passed on to the customers but these two documents have been rejected by the Commissioner (Appeals). 24. In Principal Commissioner of Customs (ACC Imports) vs. Nokia India Sales Pvt. Ltd. - CUSAA 66/2025 & CM APPL. 23910/2025 decided on 07.07.2025, the Delhi High Court examined this issue and held that the Certificate of a Chartered Engineer had to be accepted if there was no evidence to the contrary produced by the department. The observation of the Delhi High Court are as follows: "13. Mr. Sawhney, Id. Counsel appearing on behalf of the Respondent company submits that the company has discharged its burden by submitting the chartered accountant's certificate along with ledge....